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Discovery allowed in TCPA class action

A defendant in a Telephone Consumer Protection Act lawsuit was unable to strike class allegations in the case, although the Illinois federal district court judge did toss one of the named plaintiffs.

In a consolidated class action complaint filed in February 2014, five plaintiffs alleged that State Farm Mutual Automobile Insurance Company was vicariously liable for telemarketing calls made on its behalf by third party Variable Marketing in violation of the TCPA.

After losing its motion to dismiss the suit, State Farm sought to dismiss the individual claims of two of the plaintiffs and strike the class allegations, arguing that the plaintiffs had set forth a fail-safe class definition.

The complaint proposed the following class definition: “All persons within the United States who received a non-emergency telephone call from Variable, placed while Variable was acting on behalf of State Farm, to a cellular telephone through the use of an automatic telephone dialing system or an artificial or prerecorded voice.”

Because the members of the class necessarily depend on a future decision on the merits – specifically, which calls Variable made “on behalf of” State Farm – the class definition was impermissible, the defendant told the court.

Alternatively, the plaintiffs contended that the motion was premature and that they should be allowed to conduct discovery before the court ruled on the issue of class certification. U.S. District Court Judge Amy St. Eve sided with the plaintiffs. “It may be that Variable, State Farm, or a third party maintained records that identify which Variable calls were directed to State Farm agents,” she wrote. “Simply put, Plaintiffs need additional discovery to determine the extent to which they can link calls made by Variable to State Farm. At this point, it is not clear that Plaintiffs allege a ‘fail-safe’ class.”

Other arguments against certification from State Farm – that the class is not ascertainable, that the plaintiffs’ claims require individualized determinations, and that the factual and legal differences in the theories of vicarious liability overwhelmed commonalities – were also brushed aside by the court.

“While State Farm may ultimately prevail on one or more of these arguments at the class certification stage, Plaintiffs are first entitled to conduct further class discovery to determine the extent to which they can refute these arguments by linking the Variable calls to State Farm,” the judge said.

However, the court did agree that one of the named plaintiffs should be tossed from the suit. State Farm challenged two of the plaintiffs, Matt Clark and Josh Friedman. While Clark made a sufficient allegation in which he stated the phone number that placed a call to him and linked it to a telemarketer placing calls on behalf of State Farm, Friedman did not.

Friedman stated only that he “received a telephone call to his cell phone from [a telephone number] via an automatic telephone dialing system and using an artificial or prerecorded voice.” He did not allege that he received the call from State Farm or from anyone calling on State Farm’s behalf; nor did he allege to whom the phone number belongs. Friedman “cannot state a cause of action against [State Farm] by pleading only that he received a phone call from an unknown number,” Judge St. Eve said, dismissing his claims without prejudice.

To read the order in Smith v. State Farm Mutual Automobile Insurance Co., click here.

Why it matters: While some courts have agreed with TCPA defendants that plaintiffs have constructed an impermissible fail-safe class (like an Ohio federal court last year in a suit against CVS Pharmacy), the Illinois judge was not persuaded by State Farm’s position. The plaintiff’s vicarious liability allegations and the possibility that a third party might have records of the calls made on State Farm’s behalf were sufficient to keep the class claims alive, at least for now.